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Utilico Emerging Markets Ltd. Releases Chairman’s Statement And Year End Results to 31 March, 2011
Hamilton, Bermuda – 22 June, 2011 - Utilico Emerging Markets Ltd (the “Company”; Ticker: UTILEMU.BH) has released the audited financial statements for the fiscal year ended 31 March, 2001.
Chairman’s Statement
I am very pleased to report that Utilico Emerging Markets Limited (“UEM” or “the Company”) achieved a total return per ordinary share of 21.4% in the year to 31 March 2011. The total return was achieved by a diluted net asset value (“NAV”) per ordinary share gain of 18.1% to 175.28p and dividends paid during the year of 4.80p. This is an outstanding performance in challenging markets. The performance outstripped the MSCI Emerging Markets Index which rose 9.6% over the year (sterling adjusted).
Since inception UEM’s NAV per ordinary share has gained 78.2%. Adding back dividends of 22.35p over the last six years results in an average annual compound total return per ordinary share of 13.8%.
The increase in UEM’s NAV was driven by the continuing gains on the portfolio which amounted to £70.4m and arose across most of the portfolio.
The revenue earnings per share (“EPS”) have been strong reflecting the underlying strengths of the investee companies. It is pleasing to report that the revenue EPS rose by 20.1% to 5.61p.
Against this background the Board has proposed an increased final dividend of 1.45p, up 38.1%. The total dividend for the year is 5.20p, up 8.3%.
The Company bought back a substantial number of warrants, S shares and ordinary shares over the year. UEM invested £11.5m, buying in 8.1m ordinary shares at an average share price of 141.90p per share. In addition, the Company invested £4.8m in buying back warrants and S shares. The balance of the warrants and S shares were exercised and increased the ordinary shares in issue by 23.4m and raised £23.4m. The net effect of all the above is that the number of shares in issue increased by some 15.3m and UEM’s capital increased by £7.0m over the year.
It should be emphasised that buybacks are an investment decision and there is little evidence they reduce the discount. It is pleasing to see the Company continue to buy back shares in the current year.
ICM Limited (the “Investment Manager” or "ICM") earned a performance fee for the first time in two years due to the Company’s strong results. This was settled in early April. Half the fee is payable in ordinary shares which were purchased in the market given the discounts available at the time. As a result UEM reduced its performance fee costs by £0.3m and this has been added back to the assets in the current year.
The Investment Manager has continued to exercise tight cost controls and the total expense ratio (“TER”) (excluding the performance fee) has been maintained at 0.8%.
Your Board has adopted a policy of holding its Board meetings in countries where the underlying portfolio is invested. At the same time as attending the Board meetings the Directors have visited a number of investee companies. Over the last two years the Directors have met with over 50% of UEM’s current investee companies by value. This has been a valuable and rewarding experience encouraged by the Investment Manager. This has placed considerable time demands on the Board and I would like to thank all my fellow Directors for their attendance.
In view of the increased time commitment and escalating demands placed on the Board the remuneration committee has resolved to increase the Directors’ fees by £2,500 to £27,500 and the Chairman’s fee by £3,000 to £38,000.
I am pleased to see the rising shareholdings of the Directors in UEM as a result not only of their fees being paid in shares but also as a result of the exercise of their warrants and subscription shares. As at 17 June 2011 the Directors held 1.7m ordinary shares with a market value of £2.8m.
The Bermuda Stock Exchange is now a recognised exchange and as a consequence enables ordinary shares to qualify for inclusion in ISAs in the
During the year Garth Milne stepped down as a Director. I would like to thank Garth for his support and commitment to UEM and I am pleased he will be continuing as a consultant.
Anthony Muh joined the Board in October 2010 and stands for election accordingly. Anthony has already added considerably to the Board’s deliberations.
It is with deep sadness I must report that Rupert Stevenson, of Westhouse Securities, passed away earlier this month. Rupert was instrumental in the formation of UEM. We will all miss his ability, energy, enthusiasm and drive.
Most of our investee companies continue to report excellent results both at the top line but also at the bottom line. There are a number of challenges which remain unresolved in the wider economies including high sovereign debt, artificially low interest rates, and inflation. However, our portfolio looks well positioned to meet these challenges and deliver value for the longer term.
Alexander Zagoreos
Chairman
20 June 2011
The full text of the RNS press release along with the Annual Report is published on the Company’s website, www.uem.bm
For further
Alastair Moreton 0207 601 6118
Hannah Pearce
Westhouse Securities Limited (Nomad and Broker)
F&C Management Ltd